We're championing rural Australia: Telstra

Telstra has moved to cast itself as the champion of rural and regional Australia's telecommunications interests as debate over regulation of the sector grows ever more heated.Tony Warren, general manager, regulatory affairs, told the Morgan Stanley Telecom for Investors conference yesterday Telstra was "completely committed to serving its customers, no matter where they are" and it was the only player in the debate over regulation "acting with the interests of regional Australians in mind".

Telstra has moved to cast itself as the champion of rural and regional Australia's telecommunications interests as debate over regulation of the sector grows ever more heated.

Tony Warren, general manager, regulatory affairs, told the Morgan Stanley Telecom for Investors conference yesterday Telstra was "completely committed to serving its customers, no matter where they are" and it was the only player in the debate over regulation "acting with the interests of regional Australians in mind".

Warren said the debate had been clouded by the government's role as both owner and regulator with several matters that would normally have been dealt with in a privatisation process well before now still outstanding.

"With the debate on the legislation needed to support [the sale of the third tranche of Telstra shares] now behind us, hopefully a rational and less highly charged discussion of the need for updating of the regulatory framework to address this industry evolution can proceed".

If the regulatory settings are tuned properly, he said, they could "severely and detrimentally impact the levels of investment and consequently the quality of telecommunications services in this country".

Warren's remarks come amidst a furious and publicly-played out campaign by new Telstra boss Solomon Trujillo and his regulatory chief, Phil Burgess, to force the government to tilt regulatory settings more in favour of the carrier so it can operate a sustainable business with growth potential. A key target of the campaign is the nation's competition watchdog and its tight controls on the carrier.

Warren hit back at suggestions that Telstra had been "grandstanding" over the past few weeks to try and get out of regulation "that applies to all".

He pointed to a raft of regulations specific to the carrier with which it had to comply on top of broad business regulation and industry-specific regulation, including the network reliability framework, price controls, accounting separation and free directory assistance.

"At a time when the rest of the world is winding back regulation on the back of growing competition, Australia is increasing the scope and reach of regulators and expanding the power of political involvement in the regulatory process.

"At a time when the company needs to be fleet of foot, to compete effectively on a local, regional and national stage, this legislation forces us to become a 'super bureaucracy'".

He said compliance with the current regulatory regime -- not accounting for new conditions applied by the sale Bills -- required the work of more than 90 full-time Telstra staff and cost at least AU$12 million per year.

Warren pointed specifically to the ACCC, claiming the watchdog was ordering the telecommunications company to wholesale new-generation products -- most notably Business Grade DSL -- below cost. These products, he said, should not fall under regulation designed for basic telephony in a monopoly environment as the carrier was not necessarily wielding the same degree of market power over them.

"The ACCC has attempted to pressure Telstra to sell BDSL to its wholesale customers at prices that are not economically viable for Telstra, even though these companies could invest in their own infrastructure and/or use alternative products (available from Telstra) to compete with BDSL".

Warren attacked the competition watchdog's proposals for the price by which competitors can gain access to the unbundled local loop (ULL) -- the copper wire between telephone exchanges and customer premises -- as being "well below cost".

"The ACCC wants to force Telstra to provide access to ULL services at a 40-45 percent discount on the prices determined by the ACCC itself just 10 months ago," he said.

"All this does is reduce the incentive for Telstra and other carriers to invest in infrastructure, innovate and roll out new services".

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